Oct. 11 (Bloomberg) -- Chinese equities rallied the most in
a month in New York after Goldman Sachs Group Inc. recommended
buying Home Inns & Hotels Management Inc. and as data showed
Qihoo 360 Technology Co.’s search market share grew.

The Bloomberg China-US Equity Index of the most-traded
Chinese stocks in the U.S. climbed 2 percent to 103.79
yesterday, the biggest gain since Sept. 3. Home Inns, China’s
largest budget hotel chain operator, climbed to the highest this
week after Goldman Sachs added the stock to its top pick list,
while China Lodging Group Ltd. increased the most in six days.
Software developer Qihoo rallied the most in three weeks and
21Vianet Group Inc. jumped to the highest level since 2011.

Chinese Premier Li Keqiang said yesterday the nation’s
economic growth probably exceeded 7.5 percent in the first nine
months of the year, a sign the government will next week report
success in halting a two-quarter slowdown. Tourism revenue
during the week-long Chinese holiday increased 21 percent from a
year earlier to 223.3 billion yuan ($36.4 billion), according to
data from the China National Tourism Administration.

“Middle-class and small-business travelers drive up
occupancy quickly at budget hotels when the economy recovers,”
Michael Ding, lead manager of the China Region Fund at U.S.
Global Investors, which oversees $2.2 billion, said by phone
from San Antonio, Texas yesterday. “Also, we’ve seen a boom in
travel and tourism in China during the Oct. 1-7 public
holiday.”

The iShares China ETF, the largest Chinese exchange-traded
fund in the U.S., climbed 1.1 percent to a two-week high of
$38.14 in New York. The Standard & Poor’s 500 Index jumped 2.2
percent in a second day of rally as lawmakers moved toward an
agreement to raise the debt ceiling and avoid default.

Budget Hotels

China Lodging’s American depositary receipts advanced 2.5
percent to $19.50, after surging as much as 6.7 percent earlier.
Shanghai-based Home Inns climbed 1.5 percent to $37.03, jumping
as much as 7 percent.

Budget hotels tend to respond more quickly to an economic
recovery in China, according to the Goldman Sachs note
yesterday. “We believe a recovering macro to be incrementally
positive to economy hotels’ RevPAR,” or revenue per available
room, the note said, adding Home Inns to the bank’s “conviction
buy” list and upgrading China Lodging to buy.

Sales in China’s retail and catering sectors increased 13.6
percent during the seven-day holiday from a year earlier to 870
billion yuan, the nation’s commerce ministry said on its website
Oct. 7.

Market Share

Qihoo’s ADRs gained 4.3 percent to $82.27, the most since
Sept. 19. The company, owner of China’s second-largest search
engine, has surged 177 percent this year.

Baidu, the biggest web search engine, advanced 4.5 percent
to $153.16, rallying the most in four weeks.

Qihoo’s share in the online search market rose to 21
percent by the end of September, while Baidu’s fluctuated
between 61 percent to 64.5 percent last month before sliding to
60 percent in early October, 86Research analysts said in a note
yesterday.

Beijing-based 21Vianet yesterday appointed Wing-Dar Ker,
who formerly worked at Microsoft Corp. as the general manager of
customer service for the Greater China region, as the company’s
president of Microsoft cloud operation. 21Vianet started a
partnership in May with Microsoft to offer cloud services in
China.